Supply chain’s biggest risk factor – humans

No matter how many systems or automated solutions a company puts in place, there’s still that ever-present element of human input required to keep the supply chain humming.
Any seasoned logistics manager knows of occurrences in which the human element has delayed or even stopped a shipment from moving. The reasons are myriad, including illness, vacation, or even carelessness. Most companies deal with it as simply a cost of doing business.
During the past year and half, however, American shippers have faced one of the biggest human risk factors in their supply chains – powerful union dockworkers and the re-negotiation of their coveted wage and benefits contracts with marine terminal employers. It started last year with the East and Gulf coast union – the International Longshoremen’s Association – and now (still being negotiated at our press time) a massive West Coast contract for the 20,000-member-strong International Longshore and Warehouse Union.
Despite the war of words between labor and management that took place last year’s protracted ILA contract negotiations, many shippers quietly analyzed their supply chains and figured out where and when they needed to reroute cargoes through West Coast ports. Fortunately, the contract was settled without incident.
Many shippers, especially those retailers who are highly dependent on cargo coming in from Asia, made similar adjustments this year, moving cargo into the country early to build up safety stock or routing more cargo through East and Gulf coast ports or ports in Canada or Mexico not affected by the ILWU contract.
One of longshore labor's biggest concerns is how future terminal technologies may do away with certain jobs. Granted, some manual jobs may ultimately disappear, but for their own sake, the ILA and ILWU should ensure their members are technology savvy and remain a value-added component to the supply chain, and not a hindrance.
Shippers should also remember—and we’re sure the most successful businesses recognize this—that while automation and information technology are powerful tools, the human element remains paramount.
Whether they are programmers creating software, managers making decisions, equipment operators maneuvering machines worth millions of dollars, drivers hauling critical cargo or workers hefting boxes by hand into a trailer or chassis, skilled workers are the logistics industry's most important asset and the key to every company's success.
In this issue, shippers will learn how less-than-truckload carrier Con-way Freight has recently followed in the path of its non-asset-based sister company Menlo Logistics to engage front-line employees to find ways to reduce steps in physical cargo movement, enhance safety across the board, and set itself apart competitively—a management concept known as lean. Many shippers, 3PLs and carriers certainly stand to benefit from engaging their employees this way.

This editorial was published in the August 2014 issue of American Shipper.